Tim Worstall

This is interesting.

Crucially, Polanyi’s vision for an alternative economy re-embedded in politics and social relations offers a refreshing alternative to the neo-liberalism of left and right. In practice, an embedded model means that elected governments restrict the free flow of capital and create the civic space in which workers, businesses and communities can themselves regulate economic activity. Instead of free-market self-interest or central state paternalism, it is the individual and corporate members of civil society who collectively determine the norms and institutions governing production and exchange.

Sounds delightful really, doesn’t it? Happy gambolling workers in charge of their own destinies as a solution to the ills of capitalism while avoiding the concentrations of power inevitable under a system of central planning.

So what might be the effect of such a system, for, remember always, there are no solutions, only tradeoffs.

Because of the way workplaces and the investment mechanism are structured, Schweickart’s model aims to facilitate fair trade, not free trade, between nations. Under Economic Democracy, there would be virtually no cross-border capital flows. Enterprises themselves will not relocate abroad, since they are democratically controlled by their own workers. Finance capital will also stay mostly at home, since funds for investment are publicly generated and are mandated by law to be reinvested domestically. "Capital doesn’t flow into the country, either, since there are no stocks nor corporate bonds nor businesses to buy. The capital assets of the country are collectively owned — and hence not for sale.

Oh my, that’s the developing world fucked then, isn’t it? Mone of us rich world people can invest in a factory, in a business, in anything at all, outside our own national borders, thus insisting that those poor folk in other countries will have to stay poor. We can’t even lend them money for finance capital is similarly restricted.

Hmm, perhaps this isn’t such a good idea after all then.